As higher oil prices boosted revenue of the Arab world’s second-largest economy, the government of the United Arab Emirate (UAE) net operating surplus more than doubled during the first quarter of this year.
Operating surplus for the three-month period to the end of March rose to Dh36.4 billion ($9.9bn), up from Dh15.9bn posted in the same period in 2021, according to the latest data released by the ministry of finance yesterday.
The data showed that public revenue in the first three months of the year rose by 39% on an annual basis to Dh123.8billion. The UAE economy, which rebounded strongly from the Covid-19 pandemic-driven slump in 2021, has carried the growth momentum into this year.
The country’s economic output is set to post its strongest annual expansion since 2011 after it grew by 8.2% in the first three months of this year. The UAE Central Bank said in its latest Quarterly Economic Review 2022 that this was driven by a sharp increase in oil production, as well as a noticeable improvement in the real non-oil gross domestic product.
The UAE economy, which expanded by 3.8% in 2021, is expected to grow by 5.4% and 4.2% in 2022 and 2023, respectively, the Bank said in July.
Oil prices, which rose by 67% last year, are currently trading near the $90 to $100 per barrel mark, despite falling from a recent peak of $123 per barrel on demand concerns amid rising fears of a global recession.
Reports say public spending in the UAE at the end of March reached Dh87.4bn, a 19.6% year-on-year increase. Total spending included Dh28.7bn for employee compensation payments; goods and services usage of Dh30.9bn; as well as Dh14.1bn for social benefits; Dh6.4bn for subsidies; Dh1.7bn for interest; Dh1.6bn for fixed capital expenditure; Dh304 million for grants; and Dh3.8bn in other expenses.
Vice President and Ruler of Dubai, Sheikh Mohammed bin Rashid, in October last year, approved the UAE budget for 2022 with total expenditure of Dh58.93bn.
The largest share of the budget was allocated to the development and social benefits sector at 41.2%. This included 16.3% for education, 6 per cent for social development, 8.4% for health, 8.2% for pensions and 2.6% for other services. About 3.8% of the budget was allocated to the infrastructure and financial resources sector.
The UAE Federal National Council said in June, it plans to boost the federal budget spending for this year by an additional Dh1.23bn, with revenue estimated to increase by about Dh374.9m. The country also announced a five-year federal budget last year with a total spend of Dh290bn until 2026. Sheikh Mohammed said at the time that the UAE was sending a message that the country was primed for further success.
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